Differential Revenue Calculation for Product D - Carmen Co.

Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $20 per pound and costs $15.75 per pound to produce. Product D would sell for $38 per pound and would require an additional cost of $8.55 per pound to produce.

What is the differential revenue of producing Product D? a. $6.75 per pound b. $18.00 per pound c. $22.25 per pound d. $6.25 per pound

The differential revenue of producing Product D is $38 - $20 = $18 per pound.